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  • Chacha1981 Chacha1981 • Dec 19, 2003 11:46 AM Flag

    Long and Short of LPSN

    Since it seems to be working, I'll tell you my LPSN strategy. Please shoot holes in it or let me know if you have a suggestion. I decided I wanted to hold approximately $20,000 of LPSN in my tax-deferred account. I bought 5000 shares on October 13 ($4). Since then, I sell 500 shares each time the stock increases $.50 and buy 1000 shares each time it goes down $1. So far, this is what has happened.

    10/23 Sold 500 4.50
    10/23 Sold 500 5.00
    10/27 Sold 500 5.50
    10/27 Sold 500 6.00
    10/29 Bought 1000 5.00
    10/30 Sold 500 5.50
    11/5 Sold 500 6.00
    11/13 Bought 1000 5.00
    11/14 Sold 500 5.50
    11/18 Sold 500 6.00
    11/24 Sold 500 6.50
    11/24 Sold 500 7.00
    12/5 Bought 1000 6.00
    12/10 Bought 1000 5.00
    12/11 Sold 500 5.50
    12/16 Bought 1000 4.50

    I currently have 4500 shares and a buy in at 3.50 and a sell in at 5.00. I believe I made this sceme up for a small, volital, low share priced stock that has upside potential.

    Comments? $5500 gain on .50 up move in three months.

    Cha

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    • beatles_songbook beatles_songbook • Dec 20, 2003 12:43 AM Flag

      That's a fascinating strategy. I have played around with a similar approach on occasion with other stocks. It does indeed work with volatile stocks, but it's only safe if you are working with a stock that is very unlikely to have a major collapse. I envision the approach to be like establishing rungs on a ladder. As long as the stock keeps fluctuating within the rungs of the ladder, you can make it work. But if it goes way down, you are left holding all of the rungs on the ladder and if it goes way up, all of your rungs become sold. The way you are doing it with LPSN is good because you have enough shares to establish about ten rungs on the ladder, and are not likely to be sold out of all your rungs anytime soon. Unfortunately, when working with a speculative stock like LPSN (which we still have to call it at this point), the downside risk is cnsiderably greater than it would be when working with a fairly volatile yet more established and therefore safer company such as EBAY, which is a bit over-valued but not likely to tank out of range, or to soar out of range. Just some thoughts. Good luck with the strategy. I personally got weary of it because it involves fairly frequent trades and a lot of monitoring of the market. I prefer now to use the "rungs on the ladder" approach now only as a way of averaging into a position with a companyh that I believe in for the long term, which is what I had in mind when I was looking the other day at adding more LPSN for every .75 that it dropped, and then just holding it from there. I still do plan to add more at 3.75 and 3.00 should it go there, but I don't plan to sell any shares in the short term even if it pops again beyond today's upside. Regards, Gina

      I know you
      You know me
      One thing I can tell you is you got to be free

 
LPSN
9.80May 23 4:00 PMEDT